Political and Regulatory Change

Another type of change that opens up opportunities for new businesses is political and regulatory change. This type of change creates opportunities because it is productivity enhancing. For instance, the deregulation of telecommunications allowed many new firms to form and introduce less expensive ways to transmit voice and data that benefited both businesses and consumers.[3]

In other cases, the opportunity that political and regulatory changes generate is not productive, but merely shifts value from one set of economic factors to another. For instance, a town ordinance that requires everyone in the town to use two grounding rods for electricity, even through one grounding rod is all that is necessary for safety, would create an opportunity for an entrepreneur to take wealth away from consumers. Because the grounding rod has no actual benefit, the ordinance creates an opportunity that is not productive, but rather is wealth shifting.